The 12-day war between Iran and Israel revealed important dynamics shaping the regional order, particularly for the Gulf Arab states. The current strategic landscape in the Persian Gulf is shaped by the U.S. “Pivot to Asia” strategy, which aims to contain China. One consequence of this realignment has been the deepening of Israeli engagement in the region, reinforced by normalization efforts between Gulf states and Israel.
In the wake of Hamas’ October 7 attack on Israel and subsequent Israeli offensives in Gaza, Lebanon, and Syria, as well as the collapse of the Assad regime, Israel has sought to assert its vision of a “New Middle East.” This effort has taken on a more aggressive tone, culminating in Israel’s strike on Iran’s nuclear facilities, backed by the United States. These developments have heightened Gulf Arab anxieties about Israel’s growing dominance and the implications for regional autonomy.
Iran’s retaliatory strike on the U.S. Al-Udeid base in Qatar further complicated the picture, raising urgent questions about the Gulf states’ ability to remain neutral in the face of escalating conflict between Israel/the U.S., and Iran. Nonetheless, the Gulf monarchies continued to pursue independent diplomacy with Tehran—an approach that played a significant role in preventing the June 2025 Iran-Israel conflict from expanding further.
This raises two central questions: Why did the conflict remain limited despite direct confrontation between Iran and Israel, and U.S. involvement? And why did Iran’s unprecedented strike on Qatar’s Al-Udeid base—marking the first direct targeting of a Gulf Arab state by Tehran—not escalate the war, but instead result in a ceasefire mediated by Qatar, the very state attacked?
Reassessing Gulf Arab Relations with Iran
Since the 1979 Iranian Revolution, relations between Iran and the Gulf Arab states have been marked by tension and mistrust. However, a new layer of complexity has emerged: growing concern over Israel’s potential hegemony. While several Gulf states normalized relations with Israel under the 2020 Abraham Accords, public sentiment across the region continues to view Israel as a foreign and colonial actor whose role increasingly threatens regional stability.
Vali Nasr, former advisor to President Obama, argues that the 12-day war was intended to entrench Israel’s status as the dominant regional power, with full U.S. backing—effectively closing the space for alternative centers of influence.
Since October 7, 2023, some Gulf monarchies have grown more cautious toward Israel, perceiving it as a volatile and aggressive actor in light of its military operations in Gaza, Lebanon, Syria, and beyond. The notion of a new regional order shaped by Israeli military primacy—backed by Western powers and immune to accountability—has become unsettling for traditionally pro-Western Gulf elites. For decades, Iran was perceived as the principal destabilizer. That calculus is shifting: Israel is now increasingly viewed as the most destabilizing force in the region.
While Gulf Arab states remain wary of Iran’s nuclear ambitions, they also strongly oppose scenarios that might lead to full-scale conflict between Israel/the U.S. and Iran or the collapse of the Islamic Republic. In the context of the recent war, many welcomed the weakening of Iran’s nuclear infrastructure, but remained deeply concerned about Israel’s unchecked military dominance and the risks of regime collapse in Tehran.
Gulf Arabs prefer dealing with a contained Iran over regime change that could bring instability. There is a degree of public sympathy for the Iranian people and recognition of shared cultural and historical ties. Saudi Crown Prince Mohammed bin Salman’s 2022 statement referring to Iran as a “permanent neighbor” underscores a preference for regional stability over strategic chaos. A destabilized Iran could trigger refugee flows, humanitarian emergencies, and economic disruption—developments that Gulf states are keen to avoid.
Thus, while opposing Iranian hegemony, Gulf states also condemned Israel’s surprise attack on Iran. Yet, they see these strikes as weakening a rival whose nuclear ambitions long unsettled its neighbors.
They seek stability to advance domestic growth and economic visions. However, prolonged conflict or internal turmoil in Iran poses risks to regional tourism, trade, and foreign investment. This was evident when Persian Gulf airspace was closed and regional stock markets plunged during the June 2025 clashes. While wary of both Iranian influence and Israeli militarism, the Gulf states continue to pursue a balanced diplomatic path to preserve stability and protect their long-term interests.
The Costs of a Prolonged War
The 12-day war may have shown the region’s economic resilience to short-term disruptions, but a 2-3-year conflict could cost Gulf economies $730 billion to $1 trillion, hampering growth, FDI, and megaprojects. A prolonged war could shatter investor confidence and derail development strategies, erasing years of economic progress in the Gulf.
A Hormuz Strait closure would disrupt global energy flows, while any nuclear fallout or radioactive contamination of Persian Gulf waters—on which GCC states depend for 60–90% of their freshwater—would pose existential threats. Simultaneously, escalation risks enabling the Houthis to resume attacks in the Red Sea, a critical artery for Saudi trade. Most crucially, the region’s carefully cultivated image as a secure, investable haven would collapse, undermining the Gulf’s economic transformation agendas.
The region’s priorities are shifting. Israel’s heavy reliance on military force increasingly clashes with the Gulf’s emerging vision: a peaceful, economically interconnected hub rather than a perpetual warzone. Reflecting this divergence, Gulf states have sought to reduce tensions with Iran, increasingly deviating from Washington’s hardline posture. The 2019 Aramco attacks and the perceived lack of a decisive U.S. response exposed Riyadh’s vulnerability and catalyzed a strategic recalibration.
This reorientation culminated in the 2023 Beijing-brokered Saudi-Iran agreement, which marked a turning point in regional diplomacy. Growing skepticism toward U.S. defense commitments encouraged Gulf states to prioritize direct engagement with Tehran as a means of ensuring security and preserving economic stability.
This realignment aligns with Gulf economic ambitions requiring stability, predictability, and investment – goals incompatible with persistent tension. The 2023 Saudi-Iran deal was pivotal. Since then, GCC capitals have used diplomacy to mitigate fallout from Hamas’ October 7 attacks and Israel’s strikes on Iran, publicly condemning Israel while assuring Tehran of non-support for aggression.
GCC support for diplomacy and Iran’s regional inclusion stems from past lessons. Proxy conflicts contradicted Gulf interests, and the prospect of a direct U.S./Israel-Iran war today poses similar risks. Prior to October 2023, the Iran-Israel conflict remained in the shadows. But direct confrontation, despite the GCC’s neutrality declarations, now looms larger than ever.
The Path of Diplomacy
Diplomacy has re-emerged as a central pillar of Gulf foreign policy for several reasons. First, GCC states are determined to avoid becoming battlegrounds for great power rivalry, having witnessed the devastating toll of wars in Iraq and Yemen. Second, diplomatic engagement helps prevent sanctions and military escalation that could strain their still-diversifying economies.
A key lesson from the Persian Gulf is that diplomacy with Iran has been astute. Acting independently – often against Washington – they built channels that averted the worst outcomes. Iran’s avoidance of Persian Gulf targets or Hormuz closures is partly attributed to this, giving the GCC leverage as Tehran relies on regional ties to withstand U.S. pressure.
This diplomacy also elevated their regional role. Post-Al-Udeid, Qatar mediated the ceasefire despite sporadic attacks. Mohammed bin Salman frequently contacted Iran’s President. Behind the scenes, Persian Gulf capitals work to de-escalate and prevent further instability.
Gulf Arab concerns extend beyond military issues to indirect war impacts like energy market disruptions, mass migration, and extremist growth. Their development-focused foreign policy, seen in Vision 2030 and the UAE’s Projects of the 50, requires regional stability and economic connectivity. Saudi Arabia seeks to diversify its economy beyond oil into commerce, technology, and tourism. The UAE maintained trade with Iran through economic realism.
Another critical concern is the risk that continued Israeli and U.S. pressure may push Iran toward pursuing nuclear weapons, crossing a threshold seen as existentially dangerous. At the same time, there are fears that aggressive Israeli regime-change strategies could provoke state collapse in Iran, triggering regional chaos. Israel’s vision of a “New Middle East” driven by hard power offers little space for Gulf agenda or interests.
In sum, the 12-day war symbolized profound shifts in Persian Gulf security. The Gulf Arab response—measured, pragmatic, and grounded in a preference for stability over adventurism—demonstrated a maturing strategic posture. It exposed the fragility of regional security while also offering a renewed opportunity to pursue cooperation, sidestep proxy entanglements, and institutionalize preventive diplomacy.
The unified Gulf stance on the Israel-Iran conflict reflects a complex geopolitical calculus shaped by historic rivalries, economic ambitions, and evolving threat perceptions. It is a diplomatic success that builds on the momentum of the 2023 Saudi-Iran reconciliation.
As Gulf states navigate a path forward, their economic visions will continue to shape how they engage with escalating tensions. Balanced diplomacy will likely remain the preferred strategy—publicly condemning Israeli excesses while quietly hoping that Iran is weakened, but not undone, by external pressure.
For its part, Iran may draw lessons from the conflict by doubling down on asymmetric capabilities, strengthening regional partnerships, and managing competition with Gulf neighbors through calibrated coexistence.
Globally, the United States now faces a dual challenge: maintaining its strategic alignment with Israel while avoiding broader regional destabilization. This delicate balancing act will likely shape the future of U.S. engagement in the Middle East, particularly as Washington’s long-term strategic focus continues to shift toward Asia.
